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The Politics Of The Auto Plan


From NPR News, this is ALL THINGS CONSIDERED. I'm Michele Norris.


And I'm Melissa Block. If General Motors is to survive as an automaker, it's got to change a lot more than it's been willing to change up to now. That was the tough love message from President Obama today after he and his Auto Task Force ousted the company's CEO and rejected its restructuring plans. The White House wants GM to slash costs and restructure its debt even more than it already has, all before it gets additional billions in federal aid. GM got 60 days to come back with such a package. Chrysler got even less - just 30 days to wrap up its merger with Italian-based carmaker Fiat. NPR's Don Gonyea reports.

DON GONYEA: By the time the president spoke at the White House this morning, his decision had already been leaked to the media. Some Wall Street analysts and autoworkers alike heard a death knell in the rejection of reorganization plans submitted by the two companies, both already on life support. Still, some saw a glimmer of hope, figuring the news from the president could have been worse. At least the president seemed determined to preserve the once-proud carmakers of Detroit in some form.

President BARACK OBAMA: We cannot and must not and we will not let our auto industry simply vanish. This industry is like no other. It's an emblem of the American spirit, a once-and-future symbol of America's success. It's what helped build the middle class and sustained it throughout the 20th century.

GONYEA: But he also said that taxpayers cannot keep GM and Chrysler afloat without some assurance that success is likely, and so far, the president said, the automakers have not done enough to demonstrate that. He said he was given each, quote, "a limited, additional period of time" to come up with something to justify the $16 billion more GM says it needs and the $6 billion Chrysler has requested.

Pres. OBAMA: Now, what we're asking for is difficult. It will require hard choices by companies.

GONYEA: He said workers who have already made painful concessions will have to make more. And the president said creditors must stop holding out for better terms that might come with successive government bailouts. And even though he had just announced the ouster of GM CEO Rick Wagoner and the offer to guarantee the warrantees on GM cars, Mr. Obama insisted his latest moves did not amount to a takeover.

Pres. OBAMA: Let me be clear. The United States government has no interest in running GM. We have no intention of running GM. What we are interested in is giving GM an opportunity to finally make those much-needed changes that will let them emerge from this crises a stronger and more competitive company.

GONYEA: Wagoner's removal as CEO was the most unexpected element of what the White House has done. That news broke Sunday night. The president said GM needed a new vision, but there was also a sense that the White House needed something to show an American public growing weary of taxpayer bailouts. On NBC this morning, Michigan Governor Jennifer Granholm had this reaction to the news.

Governor JENNIFER GRANHOLM (Democrat, Michigan): I know that Rick Wagoner has worked for that company for 31 years, and he is a good man. He clearly is a sacrificial lamb.

GONYEA: The Wagoner firing made the day's decision reverberate through this and other industries, but it leaves many unanswered questions. The president again raised the specter of bankruptcy for GM and Chrysler. He said that specter shouldn't scare buyers away from GM or Chrysler products, given the new government guarantee for their warrantees. But Michigan Congressman Sander Levin, who's district is full of car plants, suppliers and lots of people dependent on the industry, says he hopes bankruptcy is still just a threat and not the underlying strategy.

Representative SANDER LEVIN (Democrat, Michigan): There are simply so many uncertainties about a bankruptcy procedure. I hope the bondholders and others got the message, look. Bankruptcy would wipe you out.

GONYEA: Today's White House action was less than Levin was hoping for.

Rep. LEVIN: It's a lifeline, and I hope it's more than a lifeline.

GONYEA: Levin says it increases the pressure on everyone involved with the industry. Long-time Michigan political analyst Bill Belanger puts it even more bluntly.

Mr. BILL BELANGER (Political Analyst): We've been whopped upside the head here in Michigan and told this may be the last chance you have. You've got to get it right this time. If you don't have it right in 60 days, forget about any more edicts from the federal government. You're going to be swimming on your own, and you may decide that's a heck of a lot worse than anything President Obama does to you.

GONYEA: Don Gonyea, NPR News, Washington. Transcript provided by NPR, Copyright NPR.

Don Gonyea
You're most likely to find NPR's Don Gonyea on the road, in some battleground state looking for voters to sit with him at the local lunch spot, the VFW or union hall, at a campaign rally, or at their kitchen tables to tell him what's on their minds. Through countless such conversations over the course of the year, he gets a ground-level view of American elections. Gonyea is NPR's National Political Correspondent, a position he has held since 2010. His reports can be heard on all NPR News programs and at To hear his sound-rich stories is akin to riding in the passenger seat of his rental car, traveling through Iowa or South Carolina or Michigan or wherever, right along with him.